Home Forums Discussions General Discussion New Practice Advice

My wife tells me I need to stop spending time on this forum because it scares the chit out of me and makes me wonder why I am about to do what I am about to do which is open up my own shop. Finished residency in 05, worked as an employed FP for 3 years in a huge multispecialty group (150 docs) but returned home to Florida where I am currently working 12 - 14 shifts a month as an employed physician in an urgent care center making more than I did as a primary care guy and working less and putting up with much less hassle (prior auths, hospice, physical therapy.....). Started the process about a year ago to open my own place, approved for an SBA loan, and have a lease in my hand which is basically the point of no return once I sign. It seems like there is a lot of sage experience on this forum so I thought I would solicit some feedback. I read the posts of the frustration out there and wonder if it is worth it to go down the road with insurance companies in the first place. I have my applications in - United offered 75% of medicare but told me not to tell anybody so I papered my bird cage with their paperwork, still waiting on most others. I'm boarded in FP and medical bariatrics which is a nice cash niche and plan to provide some other cash only services but really want to provide primary care as part of my practice. There are a few providers in my area that simply don't take insurance but run busy practices. They provide the patient with paperwork to submit and let them deal with the headache. I am seriously considering doing the same, especially after spending the past week on this and other forums. I guess the question in all of this is what do you think with all of the experience I see on this forum, what do you tell a guy who is a relatively new physician in a place to start a fresh practice without the burden of already having a bunch of employees, leases etc. Could this approach be part of the solution? Guys like me just refusing to deal with the monster that has been created. I have the advantage of staying with my current company 2 - 3 days per week while I build my practice and taper off when I can so do not need to depend on a salary any time soon although I don't want to work 6-7 days a week forever.
On a side note my wife is an attourney (not malpractice) and she agrees with many posts on this forum in that we have allowed to happen what has happened to us in medicine (as she bills 250.00 an hour in 6 minute increments) and that we have been played from the beginning. I think part of the problem is we work so hard doing what matters that it is hard for us to spend energy and time that we don't have on fixing the problem and that those "things," seem less important to us when we are doing such important work in the lives of our patients, we simply work harder to compensate for it which makes it even worse for us: work more hours, see more patients, get more frustrated, complain on forums....Anyway, would be interested and will appreciate any comments. Hope this doesn't stir up to much of a chit storm. Mike

Mike,

These are very tough questions with no absolutely correct answers.

I am an FP and have been in private practice for 17 years.

Prior to that I did Emergency Medicine, worked 12 shifts/month and took a 10-12 day block off each month AND earned a boat load of money. I loved the simplicity, no responsibilities, loved the excitement of the ER and always learning. I also, like you, eventually wanted a 'small' family practice office.

I started a small mom and pop FP in the USVI in '91. Until about 6 years ago, we did not take any insurance, opted out of Medicare, did high quality work and had a very elite, financially successful practice. It was too elite -- only rich folks could afford us. It was labor intensive as most mom and pop operations can be and reduced my ability to take time off.

Over the years we have expanded considerably -- I now have 3 offices on 2 islands, we have 7 providers (peds, FP, IM) and about 35 total staff. We formed a PPO with most of the other docs in the USVI and started taking insurance about 6 years ago. We only accept those companies that agree to pay our fee 'insurance/PPO' fee schedule and agree to pay within 15 days. We still do NOT accept medicare but do see elderly people at reduced rates who do not have resources (i.e. $6-22/visit).
We have a very profitable model, where all my docs take home over 50% of what they bill out and are able to take up to 12 weeks off/year if they can afford to or want to. I personally take 6 months off a year to go mountain biking, hiking, and sailing as well as take CME courses.

The bad: having 35 employees and all the complications, going from mom and pop to having and administrator, IT person, operations manager, front desk supervisor, insurance biller, employee issues all the time.

IF I had to take reduced fees from insurance companies, deal with Medicare, and have to fight to get my money I do not think I would do it -- too costly, too aggravating, and I would not be having fun seeing patients. I would also be working too hard and for too little money.

On another note...we are using AC and my docs like it a lot for its flexibility and it increases our work load the least compared to dictation. Because we are using AC we have a separate medical billing / managment program to handle the finances, insurance, e claims, tracking, etc. So...if AC does not have an integrated module by the time you start you might want to look at some of the other programs like eMD's.

These are very tough choices and it is good that you are asking now. What are your priorities? If it is having fun practicing, earning good money and having time in your life for other activities and interests -- why change what you are doing? IF, on the other hand, you want to be a family doc in a community and have patients/families that are yours for the next 30 years and be of service as your primary motivating goal then a small FP Practice can be wonderfully rewarding. Just do it smart and right!

I hope this rant is helpful. If you would like to see our operation I would be glad to share whatever I can. If you need a job where you earn $xxx+/year, no hospital call, 12 weeks off a year then I know where such a place might be;-)

Best,

James P. Clayton, M.D.
www.redhookfamilypractice.com
US Virgin Islands

Mike- It is a big step going out on your own. Lots of rewards...lots of headaches. I went solo about 4 years ago and enjoy it overall. It does tend to suck you in and take over your life to some extent, but it feels like real family practice(what I had in mind when I went in to the field). If you can make a cash only practice work, do it. The less you interact with the insurance companies and gov't, the easier your life will be. That being said, you can make it work the other way but be prepared to deal with prior authorizations, denials, etc.

James- If you ever want to spend some of your 6 months off at the opposite corner of the country and still work on an island, let me know! I could use a break. BTW, that picture on your website of the Virgin Islands.....that's just rubbing it in if you ask me. :-)

A private practice physician a a guy who's willing to work 80 hours a week, so he doesn't have to work 40 hours a week for somebody else.

They offered you LESS than Medicare???? &@#* them. dont sign.

Check out the Yahoo group Practiceimprovement1. There are a bunch of folks on there discussing the Ideal Medical Practice. Many are cash only practices and I think you could get some good advice.
I have been in practice 23 years, 13 solo. If I had to do it over again I would not take insurance. I am finding a trend here where the BIG TWO insurances (Humana, Anthem) are now paying less than Medicare. As a solo physician, they are not very anxious to negotiate with me.

Leslie

I was trying to rememeber the name of that group. I am actually on it--havent signed in and checked it for a few days. But yes, you do want to join that listserve.
You really want to limit the amount of insurance that you take.

Opt out of Medicaid & Medicare from the start--even if you are in Florida. To jump-start you with some patients, you might want to get on one or two insurers that pay better than the others or one that has a lot of market share. But make sure they pay decently--well, that is decently for an insurance company, because they all cheat you docs so much it would be funny if it wasnt so disgusting. They are just parasites.

Look into ways to attract patients that are willing to pay "out of network" fees and/or those completely uninsured. Or who have only "catastrophic" insurance. Then you can actually get paid for the services you provide.

I was always told if it was not good not to say it. "Less I pour water onto your flame of passion for private pracitice" let me just say "count up the cost." I am two years out in private practice in rural TN. The adminstrative issuses such as negoitating with insurances, the hastle of dealing with employees, and the overt sheer amount of time put into private practice can be very overwhelming. If you practice evidence based medicine then it is even worse as more time is required in your clinical duties with little time left to carry out the administrative duties. Employees must be paid, insurance and other overhead in not negotitable and at the end of the day you mostly come out with what you would make as a hospitalist or ED doc anyway with far less time off for family and fun. I love medicine and patient care don't get me wrong but on the other hand it is very difficult when we have been outsourced to insurance companies and business men. I made the hospital about 3 million over the last two years of which they collected 75%. I got none of that money and very little respect, you do the math. It seems a travesty that the entire deal is dependent on the face to face encounter but the one with the most important part is getting the least. Most CEOs at the hospitals make more to do a lot less. I just ask you to honestly count up the cost. So many forms for home health, referrals, labs, dme, etc that we do not get paid to handle but takes up so much time. I cannot speak for all but I am out of the hayday when good medicine meant good money and into the bottom line era of "get what you can, while you can as easily as you can."

It truly depends on what you want to do.

If your passion is for FP, I would do it. You appear to be in an area that will support a cash only practice. THAT IS IDEAL. If you do not have to deal with insurance companies your life will be much better. You can always decide to take on insurance companies in the future. I would consider medicare as a floor, but cannot give advice as that would be price fixing or some BS.

It would help if you have a referral base so you can start seeing patients. If your urgent care moonlighting does not care, this may be a source.

You are stil going to be stuck with a moderate amount of paperwork. Employees, payroll service, bills not only for rent, but also for supplies and equipment. It would be great if you can find someone who is versed in these as front desk / office manager / superemployee. You might and you might have to pay more. The key is how much you are willing to take on, and how much you delegate. As you build up a practice you WILL need to delegate more, but early on, you probably have the time to do much of the administrative things and you MUST understand how the practice works in intimate detail.

Scary, but the freedom you gain is golden.

Do consider how much free time you wish. Figure out who will cover you for vacations and such. Make sure they are willing to cover you as much as you wish and how much they would like in return.

Your free time is going to be MUCH more limited purely because you are now on call 168 hours a week as a solo. It's not that bad, but it is more than you had for the last couple years.

Wendell, George, Leslie, Wayne, David, James, Thanks so much for your input. My wife still tells me to stay off of these forums but I value your input and am gratefull for your willingness to share your experience. Lots to think about, the "landlord," is not so happy that I have decided to take some time to rethink a few things but he doesn't have to pay someone to collect his rent check so he can get in line. Will keep you posted, and will probably have a lot more questions once I'm up and running on AC. regards, Mike

Maybe you should have her read the thread. She has a vested interest in your future (and her free time.) She should be aware of what factors need to be taken into consideration.

What is her feeling about your future endeavor?

My wife was scared to death when I told her I wanted to leave the group and go solo. (Something about men/adventure and women/stability). 9 years later, outstanding staff who are good friends, autonomy, rapidly deployed innovation and TWICE the income, she has come around. You have one life my friend, what do you want to do with it.

80% of Medicare, You got to be kidding. Dont settle for less than %140 of Medicare. Their screwing you! The Medicare rate @ %100 is considered bottom of the barrel. It is the index to which all insurances are based. Medicaid is ~ %80 of 2007 Medicare. Most insurance contracts are considerably ABOVE the Base Medicare Rate. Dont sign....! Counter the bid. Their taking advantage of your innocence.

I was told by Anthem when I questioned their below-Medicare rates that they do not compete with Medicare and therefore do not care what Medicare reimburses.

Leslie

It is facinating to me how rates vary across the country.

In some areas, less than medicare (RBRVS) seems to be common and in others 120-140% is the floor.

I doubt it is simply supply and demand, although I am sure that plays a role. Cost of living also plays a role.

Of course, medicare rates vary by the area of the country, but they are not radically different in the various regions (I believe.)

True the rates vary, In this area of Tampa bay the norm is 85-90% of medicare for the big formularies, you can join an IPA and get 120% of the smaller ones. when I practicted in Georgia in a huge multispecialty group we started negotiations at 120%. Leslie it will be interesting to see what anthem will have to say when congress fails to stop the medicare cuts, think they will care then?

Mike

Well, I hope they begin caring a lot sooner because, in my area, several hospitals and hospital-owned groups have dropped Anthem (which is one of the biggest in the area). Anthem just snagged the school district away from Humana (by promising lower premiums) and now the teachers are fuming because they can no longer go to their hospital of choice and many have had to change physicians. It would not happen if the teachers had the power to choose their own insurance and the plans within.

Leslie

And, when I called Anthem to try and negotiate my contract they told me to send them 15 of my most common procedure codes and what I thought they should pay me. However, "do not send any E&M codes because those are not negotiable". Huh? I am an Internist. Evaluate and Manage is what I do. I am convinced we will be screwed no matter what.

Leslie

But here is something consoling. It may not matter anyway because if Congress forces me to provide health insurance for my employees and at the same time the Medicare cuts take effect it will likely be the end of my ride. Then I may very well do what I laughed about doing years ago....get me a horse and buggy and become the doctor for the Amish in my county!! Honestly not really all that unappealing.

Leslie

Mike,
I am curious if you do OMT? Based on your user name, I am guessing that you do. I do also. It definitely helps our bottom line. I don't reimbursed 100% by all insurers, medicare being the worst, but when you consider it can be billed in addition to the face-to-face encounter it helps the bottom line. I often have D.O. students from UNECOM (Biddeford, ME), and I make them do OMT on tons of people. Pt's love it. Feb/March were out best OMT months in a long time, I had my students do sinus drainage technique on everyone w/ a sinus infection.

Mike,
I am solo FP in large town/small city near Bangor, ME.
I've been solo 4 years, 6 years out of residency. The 1st 2 yrs worked for large practice/group, I hated it.

When I first opened my practice, I spent the 1st year moonlighting in our community hospital E.D. (4-6 shifts per month). Therefore I did not draw salary for 6 months from my office, which allowed me to pay off our startup loan very quickly. My wife quit her job at the hospital (R.N.) and became my office manager/office R.N./front desk person/referral person. We did just fine.

She passed away 18mos ago, which made it very hard to continue but we started this office thing together and it was important for me to continue it. 2 reasons: to honor what she stood for in my life, and to stay on the mission which God has placed before me (serving pt's in a small office setting, providing patient-focused care, where they have the same doctor EVERY time).

The most important test of a choice (going solo in my case, and yours), is asking oneself if they would repeat the choice after making it. My answer is "most definitely yes I would do it again."

Obviously you understand that going into solo FP/primary care is not easy. It's hard. It's difficult to be a businessperson. I had ZERO training at running a business. But I made it work.
I surrounded myself with people that I trusted, and people that can get stuff done. I make a decision, someone helps me carry it out. That's how business works. Sometimes I have to do stuff myself, like empty a trashcan or answer a phone. No big deal.

My advice, stay small. Get big (tons of staff) and you need to see tons of patients. See fewer patients. Stay small, offer a NAME-BRAND practice. Call your practice "Mike Heim, D.O." and be very selective who you take for patients. (don't take anyone on narcotics or state medicaid). If a cash practice works in your area, do it. If not, then selectively take insurers that pay better. Opting out of Medicare is a great idea if you can sustain without it. I'm about 40% Medicare and most would leave if I opted out, so I stay in the rat-race.

For a more complete description of my office model, you may be interested in this article I submitted to "The D.O." earlier this year.

http://www.do-online.org/pdf/pub_do0109lauer.pdf

These issues sound like "lack of competition" issues. As if there are only 1 or 2 insurers which between them have most of the market share, and are using "monopoly" pricing. Or near-monopoly.

Im sorry, I'm ignorant. What is OMT?

OMT = Osteopathic Manipulative Treatment
also known as OPP or OMM
OPP = Osteopathic Principles and Practices
OMM = Osteopathic Manipulative Medicine

An approach to manual therapy, a form of therapy that uses physical contact, used to improve the impaired or altered function of the musculo-skeletal system (somatic dysfunction).


Frank J. Paiano, DO
Internal Medicine
Leesburg, FL

Thanks, That helps.
My 2 cents worth. I agree that it can be very hard, but very enjoyable. I am a selective practice, I am not large, but my patients know that when they apply to join my practice, that I do not take everybody, and most have to have a reference, or be referred from someone who is already in the practice. However, They know that Once they are in, We are Hi-quality, and "Hi-Touch". I am mostly Insurance 70%, some Private pay 5%, and about 25% Medicaid. That is the proportion that seems to work best. If I go over 25% on the Mcaid, It is very difficult to justify my overhead. I consider the use of Amazing Charts as part of the successful business plan. It makes me more efficient, the patients like getting a print-out of the plan, and "Computer-generated" Rx's that demonstrate the detail and support the "quality" of the visit. It has streamlined the interoffice communications, and messaging, and there are no loose ends on labs and callbacks. You can enjoy medicine again as a solo practitioner, because You Are In Charge!. The practice will be what you want it to be. Good luck!

Dr. Goodman,
Bravo on the type of practice you run. How did you become the "Gold" standard in your area.
Jack